Fed Official Says Gas Prices Will Take Months to Fall After Strait Reopens

A Federal Reserve official said gasoline prices may take months to decline even after the Strait of Hormuz reopens. The remarks highlight the time required for crude oil to move through global supply chains and reach refineries before lower costs appear at the pump.

Officials noted that reopening the waterway would allow tankers to resume normal routes, but the physical movement of oil still requires several weeks. Refineries must then process the crude into gasoline and diesel before distributors adjust retail prices, adding further delay.

The official explained that futures markets typically react faster than physical delivery, creating a temporary disconnect between benchmark prices and what drivers pay. Seasonal demand patterns and inventory levels at storage terminals can also influence how quickly any cost reductions reach consumers.

Energy analysts have tracked similar delays in past disruptions, where benchmark crude prices fell weeks before retail gasoline followed. Current inventory reports show U.S. stockpiles remain near seasonal norms, which may moderate the speed of any price adjustment once supply flows resume.